Stocks of memes skyrocketed on the rise in trading at the end of the day and short sellers fell

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NEW YORK, Aug. 24 (Reuters) – Shares of several retail estimates, including AMC Entertainment (AMC.N) and GameStop (GME.N), rose sharply on Tuesday afternoon, with no news apparent, which exceeded $ 1 billion in losses for short-term sellers.

While broad market indices rose modestly on Tuesday, with the Nasdaq (.IXIC) up 0.5% and the S&P 500 (.SPX) up 0.1%, several “memes” rose the gains.

GameStop shares jumped 27.53%, AMC shares rose 20.3%, Clover Health Investments (CLOV.O) rose 9.9%, Koss Corp (KOSS.O) rose 4.4%, Robinhood Markets (HOOD.O) 9.0% and ContextLogic (WISH). O) increased by 6.4%.

“When you make such a big move, it almost makes you think there is some big hedge fund or something that has decided to do some trading,” said Randy Frederick, general manager of trade and derivatives at the Schwab Center for Financial Research.

Frederick, however, said he had seen little in the news to drive large stock price moves on Tuesday.

The stock price jump on Tuesday also caused large losses for investors with bearish bets on some of those stocks, according to analytics company ORTEX.

“Very short stocks have been, over the last month, less volatile than earlier this year. Today we saw an end,” said Ortex co-founder Peter Hillerberg.

Stock price gains on AMC and GameStop generated losses of about $ 1 billion for short-term sellers, Hillerberg said.

Short sellers aim to make a profit by selling borrowed shares, hoping to buy them back at a lower price.

Several of these stocks also gained a higher-than-usual trading volume in the options market on Tuesday, as traders made a move either to take advantage of rally prices or moved to hedge. positions that were underwater.

For example, the trading volume of GameStop options was 407,000 contracts, or about six times the average daily trading volume recently, according to data from options analytics firm Trade Alert. AMC’s volume of options reached 1.6 million contracts, nearly three times the daily average, making it the most active single asset name in the options market on Tuesday, they showed trade alert data.

While the retail frenzy that Wall Street had taken by storm earlier this year has slowed somewhat in recent months, the periodic wild movements in stock prices have kept investors in the lurch. height, analysts said.

“Option prices imply that this will not go away any time soon,” said Brian Overby, senior options analyst at Ally Invest.

Saqib Iqbal Ahmed Reports; Edited by Lisa Shumaker

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